Morgan Stanley – Gobble Gobble, EUR Wobble; Risk of a Pause? – eFXnews

By FXStreet FXStreet (Delhi) – Morgan Stanley, sees EUR/USD remaining under pressure and forecasts a move to parity next year, MS thinks that the risks of a pause in the near-term have increased , as noted by eFXnews.

Key Quotes

“Expectations for ECBs easing in December are high, suggesting delivery risks. But we see any EURUSD recovery in the near-term as providing renewed selling opportunities although the anticipated move lower next year is likely to be at a slower pace than seen this year. EURUSD declined 25% from the mid-2014 high to the March low of this year. Downside progress since then has been altogether slower, even with the heightened expectation of greater policy divergence between the ECB and Fed.

While the USD uptrend has remained steady, we suggest that the EUR side of the equation has been far more erratic. Indeed, EUR on a trade weighted basis rebounded 10% April through August. While some EUR “catching-up” on the downside has been seen over the past couple of months as focus on potential further ECB action has intensified, the EUR still remains some way from its March/April trough in tradeweighted terms,” MS argues.

We continue to see EURUSD remaining under pressure, but downside potential is …read more

Source:: FX Street